The Rise of Vietnam

As the global economic structure rockets east, many countries in range have felt the boom of commerce. And none have responded with such vigour as the Socialist Republic of Vietnam. Hailed as ‘the one to watch’ in global tourism, Vietnam continues to emancipate itself from the long-standing closed door of insular Communism, embracing the opportunities its cultural heritage and staple rich lands afford it. With an explosive annual growth rate at over 25% sustainable for the next five years, now is definitely the time to appreciate the beauty, warmth, and charm of Asia’s most enchanting tiger cub.

After the 1986 doi moi [renovation] free-market initiative opened Vietnam’s doors to the world, the country has since become ASEAN’s fastest growing economy in both industry and global tourism. In that time, the country has blossomed into a fascinating new tourism destination providing authentic settings for the booming MICE tourism industry. In fact, the latest World Travel and Tourism Council [WTTC] annual report projects Vietnam’s travel and tourism sector [based on a rate of 7.5%] as having the world’s sixth
highest growth rate over the next ten years.

That might sound surprising. But not if you consider that in 1990, international arrivals to Vietnam stood at a mere 150,000. Today that number has increased 14 fold to a staggering 3.5 million and a total of 5 to 5-6 million is expected by 2010. This makes Vietnam the only country in the region by far to yield such dramatic results.

Even now, global brand consultancy FutureBrand has ranked Vietnam amongst the top 10 world’s best travel destinations and in tenth place as the most improved country brand. A recent survey by US Travel and Leisure magazine rated Hanoi as the world’s sixth best tourist city scoring 82.09 points overall. Thailand topped the survey with Bangkok and Chiang Mai taking the first and second positions with 86.11 and 85.62 points respectively. However, not a bad achievement at all considering Vietnam’s relative global naivety.

Despite the massive increase in tourism numbers, the gross figure largely pales in comparison with such well-established hot spots as Hong Kong. In the last 10 years, the influx of foreign tourists to Hong Kong may have only doubled but the total figure now reaches around the 22 million mark. Nevertheless, it is the predicted sustainability of the boom that gives Vietnam its unique advantage.

As the facts become apparent to the rest of the world, large international investors are coming to recognise Vietnam’s cash potential. Home to a kaleidoscope of culture, stunning natural beauty and biodiversity – along with many World Heritage sites and over 3,000km of pristine coastline – Vietnam is a veritable gold mine of opportunity.

Larger tour operators saw a phenomenal increase in clients over the same period, ranging from a mere 250 per year to over 20,000. Saigon Tourist, the leading national travel company, received reservations for MICE services from 6,420 customers in November and December 2006, 1,500 being foreign with domestic MICE customers making up two-thirds of inbound contracts and 520 others booking outbound services. These kinds of numbers are a huge green light to long-term international investors looking to make the most of such an opportunity. And that opportunity is being grabbed with both hands – especially around the central coastal areas of Hue and Hoi An.

By increasing worldwide tourism offices and upgrading regional infrastructures, Vietnam National Administration of Tourism (VNAT) recognises the benefits of the ever- lucrative MICE industry. Yet without the full co-operation and backing of the many government bodies, these development proposals carry the same pitfalls that face outside investors, and adaptation to fast-paced change is a vital concern.

The decision to host the Asia-Pacific Economic Co-operation [APEC] summit and the accession to the World Trade Organisation [WTO] in 2006 were major steps in bringing Vietnam to the global dinner table. With rising international interest, it will be compelled to build upon its shortcomings and accelerate its tourism industry development.

Various independent operators are latching on to the profitable MICE business. Taking the first step, they aim to carve a niche that may prove to have limitless possibilities in relation to Vietnam’s tourism sector. One in particular is the Vietnam MICE Club. A joint venture between the national carrier Vietnam Airlines and tour operators Saigon Tourist Travel Service Co. and Hanoi Tourism, the online resource wholly dedicates itself to MICE in Vietnam.

Following their lead, other smaller operators have cropped up like the Centre of Incentive Tours and Events [CITE] that offers customised luxury MICE-oriented packages online. However, the intricacies of MICE require solid infrastructure and, more importantly, organising ability. The MICE industry also needs close co-operation among the airlines, travel firms, hotels, resorts, convention centres and the relevant official bodies. Vietnam is in a unique position now to make or break its MICE industry whilst riding the crest of its economic wave.

FutureBrand has ranked Vietnam amongst the top 10 world’s best travel destinations and in tenth place as the most improved country brand.